Deep Dive - Market reactions to SaaS transitions
Our Deep Dive analysis indicates that the UK market is cautious on companies transitioning to SaaS business models. Investors have punished share prices of companies reporting declines in revenue growth and margins even though the declines are temporary and explained by the transition to SaaS. However, after the completion of SaaS transitions, companies are typically rewarded with high multiples for high recurring revenues and margins.
17 May 2023
Software and Services Sector Quarterly review - May 2023
Big Technologies PLC (BIG:LON), 156 | Team Internet Group plc (TIG:LON), 140 | Devolver Digital, Inc. (DEVO:LON), 23.5 | LBG Media Plc (LBG:LON), 74.5
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Software and Services Sector Quarterly review - May 2023
Big Technologies PLC (BIG:LON), 156 | Team Internet Group plc (TIG:LON), 140 | Devolver Digital, Inc. (DEVO:LON), 23.5 | LBG Media Plc (LBG:LON), 74.5
- Published:
17 May 2023 -
Author:
Bob Liao, CFA | Carl Smith, CFA -
Pages:
28
Deep Dive - Market reactions to SaaS transitions
Our Deep Dive analysis indicates that the UK market is cautious on companies transitioning to SaaS business models. Investors have punished share prices of companies reporting declines in revenue growth and margins even though the declines are temporary and explained by the transition to SaaS. However, after the completion of SaaS transitions, companies are typically rewarded with high multiples for high recurring revenues and margins.